"The sector is poised for growth," said Suhas Naik, director of equity markets at ING Vysya Mutual Fund, which manages 14.42 billion rupees in stocks and bonds.
"For investors looking at the India story, Jet is a perfect launching pad," said Naik, whose fund is bidding for the offer.
At the top end, Jet would be valued at about 97 billion rupees ($2.2 billion), and the IPO is expected to raise between 16.4 billion and 19.4 billion rupees ($375 million-$444 million).
"Buoyant economic growth, increasing leisure travel and changing demographics and habits are propelling fast growth in domestic air travel," CLSA Emerging Markets said in a report released this week.
"Jet is best positioned to exploit the opportunities given its high service standards, brand equity and track record."
Founded by London-based Naresh Goyal, a former travel agent, the company has grown rapidly since it began operations in 1993 and overtook state-owned Indian Airlines Ltd, which for decades was a monopoly provider of domestic air services.
CLSA expects Jet's earnings to expand at a compounded average growth rate of 18 percent between the financial years 2005 and 2007, with 26 percent growth forecast in the year to March 2006.
At 950 rupees, the stock is valued at 21.5 times estimated FY05 earnings, while peers in the region such as Cathay Pacific Airways Ltd trade at about 11 times, according to Reuters Estimates. "Investors are bidding higher for Jet as it is operating in an expanding market, unlike regional peers, which are in a saturated market," Naik said.
The Jet Airways IPO is the first in a series of share offers scheduled by Indian companies this year as they seek to raise funds to meet the needs of a rapidly growing economy.
Last year, Indian companies raised about $2.9 billion through IPOs and an additional $3.9 billion through public share issues. Merchant bankers expect this year's tally to top that level.